Hawkish Signals From the RBNZ Could Support Further Upside

Summary:

EURNZD is currently trading around 1.9910. Markets widely expect the Reserve Bank of New Zealand (RBNZ) to keep the Official Cash Rate unchanged at Wednesday’s meeting, although the overall policy tone may remain hawkish. With inflation still running above the target range, the RBNZ is likely to preserve room for future rate hikes, which could continue to support further upside in EURNZD.

BUY EURNZD

EXP

TRADING

1.99024

Entry Price

2.05300

1.95000

1.97394 -0.01871 -0.94%

0.0

Pips

Flat

1.95000

Exit Price

1.99024

Entry Price

2.05300

Fundamentals

Markets broadly expect the RBNZ to leave the Official Cash Rate unchanged at 2.25% at Wednesday’s policy meeting. According to a Reuters survey, 28 out of 29 economists expect no change in rates this week.

However, the key issue for markets is not whether rates remain unchanged, but rather the future policy signals embedded within the statement. As voting positions within the RBNZ committee become increasingly transparent, markets are entering a phase where internal disagreements and voting splits could attract greater attention. If the meeting reveals dissenting votes or notably hawkish language, volatility in the New Zealand dollar could rise significantly.

Although New Zealand’s economic growth remains weak and unemployment stays elevated, the RBNZ currently appears more focused on inflation risks. Persistent inflation above the target range suggests the central bank is still far from fully shifting toward an accommodative stance.

As a result, holding rates steady this week may represent only a temporary pause rather than the end of the tightening cycle. Markets have already begun reassessing the possibility of additional rate hikes over the coming months, with expectations for potential moves in May, July, or even September gradually increasing.

Market expectations also reflect a more hawkish interest-rate outlook. Among 27 economists surveyed, 14 expect the RBNZ to raise the Official Cash Rate to 2.50% or higher by the end of the third quarter. Meanwhile, the median year-end OCR forecast has risen to 2.75%, up from 2.50% in April’s survey. This indicates that markets are increasingly repricing a higher terminal rate path.

Against this backdrop, if the RBNZ signals that interest rates may remain elevated for longer — or even hints at further tightening ahead — the New Zealand dollar could receive short-term support. However, from a medium-term structural perspective, EURNZD may still retain room for further upside expansion.

Hawkish Signals From the RBNZ Could Support Further Upside_1

Technical Analysis

EURNZD continues to trade above the 1.9900 level, with the broader structure still favoring the upside. The pair has repeatedly stabilized after pullbacks toward the 1.9800 region, suggesting that underlying buying interest remains strong.

From a short-term structural perspective, the pair is gradually approaching the first key resistance zone near 1.9938. A confirmed breakout above this level could pave the way for further gains toward 2.0056 and 2.0129, potentially opening a larger upside extension.

Overall, as long as EURNZD remains above the 1.9800 threshold, the medium-term bullish structure is likely to stay intact. If the market gains momentum following the RBNZ meeting, the pair could have an opportunity to advance toward the 2.05 region.

However, caution is warranted. A renewed decline below the key support zone near 1.9740 would suggest that the short-term bullish structure has weakened, potentially pushing the market back into a broader consolidation phase.

Trading Recommendation

Trade Direction:Buy

Entry Price: 1.9845

Target Price: 2.0530

Stop Loss: 1.9500

Valid Until: 2026-06-25 23:55

Support Levels: 1.9824, 1.9769, 1.9748

Resistance Levels: 1.9938, 2.0056, 2.0129

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

Risk Disclosure

The risk of loss in trading financial instruments such as stocks, FX, commodities, futures, bonds, ETFs and crypto can be substantial. You may sustain a total loss of the funds that you deposit with your broker. Therefore, you should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources.

No decision to invest should be made without thoroughly conducting due diligence by yourself or consulting with your financial advisors. Our web content might not suit you since we don't know your financial conditions and investment needs. Our financial information might have latency or contain inaccuracy, so you should be fully responsible for any of your trading and investment decisions. The company will not be responsible for your capital loss.

Without getting permission from the website, you are not allowed to copy the website's graphics, texts, or trademarks. Intellectual property rights in the content or data incorporated into this website belong to its providers and exchange merchants.

Recent Searches

Top Searches

Markets

Analysis

User

24/7

Economic Calendar

Education

Data